Since 1997, lenders and credit card companies have lobbied to reform the U.S. Bankruptcy Code. Near the end of his presidency, former President Clinton vetoed the first major bill to reform the bankruptcy laws, saying that it was too harsh on debtors.

Reform efforts picked up speed after President Bush's election in 2000, and in the past five years a coalition of banks and credit card companies spent tens of millions of dollars in campaign contributions to push federal reforms of the law. ( See Election Reform )

Bush signed the bill, called the Bankruptcy Abuse Prevention and Consumer Protection Act, [doublespeak] on April 20. While the legislation affects all forms of bankruptcy protection, most of the attention has focused on Chapter 7, which allows individuals to wipe out their personal debts and start over. ( Of course! The individual Citizen means nothing to Bush )

The new rules now require that individuals and families pass a "means test" in which salaries, assets and liabilities are calculated before they can qualify for Chapter 7. Those who don't qualify will have to file under Chapter 13, which requires some repayments to creditors.

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